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What are the basics of financial management?

basics of financial management

Financial management can be both a broad and all-encompassing term. It refers to the fundamentals of managing any and all finances, funds, and assets for a company or individual.

There are intricate details involved with different areas of financial management, but most career paths or job positions follow the similar basics.

The basic objectives of financial management

Organise finances

If you can develop a system in which finances are organised, tracked, monitored effectively, then half of your battle is won. For a business, it means finding efficient ways to record and store financial information in a clear system. For an individual client, this includes walking and talking through everything from considering which way to pay in certain situations, such as with credit card or cheque, to retirement plans and mortgages.

The process also involves researching software to help organise assets. The right tools in place can be a game changer in financial management.

Finding ways to earn passively

Some like to put their money where their mouth is. Financial managers think putting your money away so that it can grow is much more important. With the right investment plans, money can age in a way that its grows exponentially. Advising your client to save a little bit can be the best way to help them profit from their own money.

This includes taking risks on investments. High risk can equal high reward, so finding the most careful way to take chances can be very worthwhile. Understanding your client’s portfolio will help determine what sort of investments they should be looking into.

Constantly research and learn

By taking a short course, you can gain new insights into tricks, tools, and techniques which can take your financial managing to the next level. Reading about the world’s economy is a vital component in being an excellent financial manager. In finance, doing the theoretical work is just as important as implementing practical strategies.

Communicate clearly

Although most of your clients won’t know all of the terminology and financial vocabulary of the economic strategies you implement, it is still important to break down the details of what you want to do with their money. This is especially pertinent with big-firm clients where knowledge of the financial stability is key to the company’s success. Communication should be regular, with details shared every month, quarter, and year.

Financial management goals to mitigate losses

While making money work for you is one of the fundamental blocks of financial management, finding a way to save money is another. Looking to mitigate unnecessary risks which could become expensive is crucial.

Look to cut out debt

Interest can be a blessing or a burden. If you are able to assist your client such that their finances are always in the green, they will be able to enjoy the favourable side of interest. There are some occasions where spending money is simply not enough to allow profit, such as when buying necessary fixed assets, so it is important to create strategies which allow the repayments to happen as quickly as possible so that the interest doesn’t add up.

Expect the unexpected

And if you can’t predict it, at least plan for it. While your clients might be experts at planning, there are always unforeseen circumstances which will require funding. Having the right insurance in place can save against having to plunge deep into savings or into finances which were dedicated elsewhere. As a financial manager, it is up to you to explain how to insure your customers against plummeting funds from emergencies. In finance, security is key, whether in the present or for the future economy.

How to instil Customer Loyalty

customer loyalty

Customers are the lifeline of your business which is why when it comes to elevating your brand, customer service should be a priority. Simply put, loyal customers are profitable. Repeat customers mean repeat purchases and in some cases, increased purchases. This is why it’s often said that it’s more expensive to acquire a new customer base. So, how to do you ensure that your customers keep coming back? By making sure they trust your brand.

Trust is what sets brands apart. Not what they have to offer or how affordable the services/products are (although these are factors) but how they treat their customers. Customers are likely to gravitate towards a brand that provides them with the best consumer experience. You can foster brand loyalty in the following ways:

Be consistent

Consistency is key when it comes to customer service, which is why you should always strive to provide each customer with the same excellent service. How do you do this? Most large businesses will have a customer service team in place. This helps to ensure that the same message is being communicated to your customers at all time.

For a small business with a limited marketing budget, it’s more about intentions and actions than how much you spend. There are small but effective ways to thank your customer for their loyalty. These include ‘thank you’ emailers or rewarding them for their loyalty

There’s always room for improvement

Perfect is a fantasy when it comes to running a business and providing a service. There is always room for improvement and the best place to find out where you’re ‘lacking’ is your customers. Reaching out to your consumers means you value their opinion enough to help shape your business.

Create a survey regarding your customer service. Find out from your customers about their experience while engaging with your brand. This way, you’re able to determine which aspects of your customer service you should continue and which areas need improvement. Another method is to research why customers have abandoned your brand. If you can get your hands on these statistics, it would be a good idea to analyze and perhaps get feedback on what went wrong.

Be visible

If you’re lacking a social media presence in the 21st century, it’s likely that you won’t attract new customers – especially if you’re looking to increase your reach to the younger demographic. Being active on social media is important because people may get a clearer idea of who you are. The more visible you are, the more they’ll begin to accept and trust your brand message.

Social media can be used to advertise promotions or give your customers a behind-the-scenes look at how the business operates. The more they see, the more trust they’ll have in your brand.

Over-deliver

One of the main reasons customers have a hard time trusting brands is they’ve been let down. It’s why they part ways with a brand and move on to the next one. To avoid this, your customer experience strategy is to under-promise and over-deliver.

For example, if you’ve promised a client that you’ll complete something within 10 days, try and deliver within 7 days. If you’re consistent with this pattern, they’ll start trusting you more and you may receive repeat business. Even better, the word will spread and word-of-mouth marketing is something money can’t buy.

Sometimes, the customer is always right and it’s important that you always do right by them. Customers are the reason that your business has survived this long, which is why customer service should be one of your top priorities.
To ensure that you’re always improving, customer service training is important, especially if you’re part of or lead a team that deals directly with customers.

The goals of financial management

Purpose of financial management

Financial management is one of the most important components in building and sustaining a business. If a company is not able to keep their funds and assets in order and up to date, it can be detrimental to its success.

What is financial management?

Before looking at what the purpose of financial management is, it’s worthwhile knowing exactly what is involved in the industry.

A financial manager takes on all responsibilities related to the financial endeavours of a company. This includes all steps from planning and investment options to strategic budgeting and continuity. Financial management is essentially the control of the financial component making up a business with the intention of making as big a profit as possible, while spending the least possible amount.

What are the basic objectives in financial management?

Looking after the financial ecosystem in a company is a major undertaking with many important tasks and processes involved. Often there is an entire department dedicated to looking after the funds and assets in a business, which means having the ability to work as a team is just as important as being able to crunch numbers.

Planning

Anyone in any field of management knows that “failing to plan is planning to fail”.

The process of drawing up strategies before committing financial assets is crucial in business so that money is not squandered.

If a proposed cash-flow plan is in place, it makes planning for present and future development easier. This means any budgeting is already set-up, which ensures that money is allocated before it leaves the business, which helps to alleviate problems of debt.

Financial planning also includes sourcing funds, such as holding investment rounds or taking out any loans, which can then be used to grow the business with the intention of producing enough revenue to either pay back loans or turn profit to develop the business further.

Storing the funds is a long-term part of financial planning. The ideal plan to store assets is one which involves earning, such as investing funds which passively grows.

Communicate information

One of the major responsibilities in financial management is breaking down and communicating relevant and important information to internal and external stakeholders. The pertinent information should be shared every month, quarter and year. This helps to ensure that the accountants are provided with the correct information on time. Regular updates also provides investors with information showing the financial performance of the business.

Risk management

“High-risk, high-reward” means that a financial manager has the possibility of making or breaking a business’ financial state. Putting funds in a low-risk investment means that there is more of a guarantee of making back money, but the profit might not necessarily be a large sum. Using a high-risk investment strategy can yield a lot more money, but also might mean losing out if things turn south. The financial manager holds the key to discovering which sort of investment is suitable for an individual or a company.

As well as being able to manage the risk of a company in terms of asset investment, the financial manager also is responsible for risk mitigation. Being able to put methods in place to reduce risky activity, such as fraud or embezzlement, is key to prevent financial accidents which could leave to failure. Having insurance schemes can ensure that the business will survive should anything bad happen. It’s up to the financial manager to know which ones are well suited for the company.

Eager to learn

Finding new ways to complete tasks is an important aspect in any sort of managerial position. With new strategies emerging and technology constantly evolving, it’s highly recommended to stay updated with improved systems and techniques to manage a company’s finances efficiently. Taking a short course in financial management is one way of gaining theoretical insight which can then be applied practically.

The Importance of Customer Service

The Importance of Customer Service

Imagine this: you walk into a store looking for a pair of birthday sneakers for your nephew. It’s sneakers you know he’d love and bonus, it’s half price! You’re searching for his size but can’t find it. Perhaps the staff will know but the only problem is, you can’t find a single employee on the floor. When you do find someone, it takes a further 15 minutes and just when you thought they forgot about you, they finally found the size!

Browsing around the store, you notice there’s one cashier at the tills and the line is enough to make you put the sneakers down and head out the store. You make your way to the line and persist, but in your mind, you’ve made a promise to never step foot in the store again – even during sale time.

You’ve heard the saying that the customer is always right. It’s a sentiment with negative connotations but really highlights why customer service is vital to your business. The above scenario is one that happens too often. No matter what value you offer your customer, you also need to ensure that you’re offering them a top-quality service.

Great customer service could positively affect your business in the following ways:

Retention is cheaper than acquisition

While it’s always great to attract more customers, you always need to rely on the loyalty of your current customers. Why? Your current set of customers know your brand inside out and they know what to expect and will likely be spending more. Meanwhile, new customers will be testing the waters. You’ll also be spending more on marketing to them to depict why you’re a trustworthy brand.

What most brands do is award loyalty rewards to current customers. This could a point system or a reward for being a loyal customer. By taking care of your old customers, word will spread and you’re likely to gain a new ‘fan base’.

Increase your brand image

Take your mind back to the scenario at the beginning of the blog. You’ve experienced such bad customer service and you’re ready to tell everyone you know. Maybe this is not the first time the store has had such poor customer service and it now has a reputation for it?

Brand reputation is important. Simply put, a bad reputation = fewer sales. Know what your brand represents and make sure that it’s a mission statement that your employees practice every day. Building a customer service team will help put the focus on great and effective services. This team will tend to the needs of the customers, define positive customer experience, and ensure that there is always a customer conversion.

Increased profit

A bad experience means that you’re ready to head out the store – with or without an item. Exceptional customer services mean that the employees have gone above and beyond to ensure that customers have left with a smile on their face. How do you make sure this happens whenever someone interacts with your brand?

Find out what your customers want. If you tend to their needs – and do it well – they’ll likely come back and spread the word. Customer surveys are still an effective method when it comes to finding out what they want or what change they’d like to see. Your customer service team will then look at results and implement accordingly.

Always remember to align your customer’s expectations with your own. By doing this, you’re likely to build a lasting strategy that will ensure your brand is always on good terms with your loyal clientele.

Growth is about continuous learning. Research and short courses will help you discover more about relationship building with your customers and how to lead customer management strategy.

What is financial management?

what is financial management

When we hear about “financial management”, we might get the impression of a well-put-together individual who has their assets in order and their budget under control.

While that’s part of the package, financial management goes much further than that with a career path that encompasses the economic life of both individuals and companies.

Financial management is everything related to the finances of a company from planning to maintenance. In a nutshell, it refers to the strategy of looking after the financial ecosystem such that a company is able to stay in the green, while planning for future growth and considering the budget needs for present and future.

Goals of the financial manager

In a broad sense, the goals of a financial manager is to ensure that the company has enough funds at any stage to maintain profitable growth and to ensure that all stakeholders are seeing returns on their investment in order to receive more investment possibilities. The financial manager should also ensure that funds are being used responsibly in a way that can lead to more revenue for the business. How efficiently money is being used by a company is the duty of the financial manager.

Other objectives in financial management are to draw up strategic financial plans in order to provide a blueprint for the allocation of funds going out of the business. This means carefully looking at the past trajectory of the revenue and considering how best to move forward with financial strategies in a calculated, clearly defined way.

In the initial stages, the financial point should decide on the amount of capital contribution needed for the business’ success. This involves considering what the company’s ideal financial infrastructure looks like, exploring what sort of assets will be purchased and when. A financial roadmap is crucial in identifying whether targets are being hit and where problems may need to be solved.

One of the fundamental components in financial management is ensuring that the company’s funds and assets remain secure.  This means ensuring that any investment the company makes is both safe and worthwhile with important aspects related to the funds. This could be anything from buying the right vehicle to employing the right staff members. to paying wages.

What are the functions of financial management?

There are several important purposes of financial management in a company and these come with their own set of tasks and responsibilities.

Research what capital is necessary

It is crucial to know how much capital is needed before launching a company. The estimation includes how much is needed for initial assets and set-up and forecasts how long it will take before the company needs to start earning revenue.

The financial manager is also involved in where the capital investment should go. The budget should be structured in such a way that the funds are used most efficiently.

Learning to do this correctly is vital in the success of the company as well as the financial manager’s career. Doing a short course in financial management is a great way to ensure you are researching the right way.

Choosing the best storage of funds

Money standing still is money lost. With inflation, it is important for money to consistently grow. This means that the financial manager should consider what the best method of storing the company’s financial assets with the intention of making more money. The ideal for this is an investment which will lead to passive profit.

Determining the source of funds

Especially when starting up, a company needs to find financial backing to maintain business operations. Choosing from where new funds come requires insight into the prospective investors as well as what is going to be required in the long-term future.

Different options for financial backing could be in the form of issuing shares for money, taking out loans, or taking out deposits such as bonds. The choice will depend on the financial roadmap as well as the business culture of the company.

Design A Better Customer Experience

Exceptional service offering

In order for your business to survive, you need customers. It’s not just about getting customers through your door, but to ensure you maintain a loyal base, while still attracting new followers. This is why it’s important to create a customer experience strategy.

What is a customer experience strategy

A customer experience (CX) is the number of activities that a company undertakes to deliver a series of positive interactions. Together, the result is an exceptional product or service offering. Creating a customer experience strategy is important because you get the chance to deliver more and also ensure efficient productivity.

The CX should consider the following:

  • Reachability
  • Purchase convenience
  • Service convenience
  • Personalisation
  • Simple processes
  • Flexibility

Difference between customer experience and customer service

While the two are often assumed to mean the same thing, there are differences. Customer service is the interaction with customers while customer experience focuses on the customer’s journey with your company.

Why you should have a customer experience strategy

While it sounds like a lot of work, developing this strategy has numerous benefits including:

Increased customer engagement

Customer engagement builds loyalty and in today’s consumer climate, people care more about what brands have done to make their experience a positive one. With an effective customer experience strategy, consumers will keep coming back for more.

Customer conversion

A good customer experience strategy creates a life-cycle of feedback that will increase conversion rates. By prioritising relationships with customers, you’ll start growing your customer base. You’ll also have a better chance of buy-in when you start launching new products or expanding.

Word of mouth marketing

When more and more people are experiencing positive customer engagement, it could lead to word of mouth marketing. This is basically the best type of marketing for your business – it’s free and comes from a reliable source (a satisfied customer).

What to include in your customer experience strategy

According to a study by consulting firm Walker, by next year, customer experience will be the most important factor customers consider when it comes to a brand differentiator. Look at the following when designing your customer experience strategy:

Know your customer personas

The first step in the process is researching your customer’s persona. You should create a group of 1-5 personas that usually frequent your store. The idea is to determine the needs of these customers and to make sure you’re always offering what they want. You want to empathise with them if they face a challenge and provide the ultimate support.

What is your customer experience vision?

You need a customer vision that needs to be embedded within all facets of the organisation. What is a customer experience vision? It’s basically a mission statement. The statement could be something along the lines of “Always be humble” or “Provide innovative service”. These statements should be immersed within the company and should reflect when you’re interacting with customers.

Rely on customer feedback

How else will you know if you’re doing right by your customer? Feedback helps you determine what you’re doing well and where you could improve. Capturing feedback could be in the form of a survey or customer email. If you have the capacity, outbound calls could work too. You could review the feedback monthly, weekly, or yearly.

You can enhance your customer management experience on the job or by looking at short courses that will help you develop these skills. The great benefit of the courses is that you can use the skills on the job. Develop core principles to set your brand apart from the rest.